Hormel Foods Corporation

Good morning, ladies and gentlemen, and welcome to the Hormel Corporation's fourth quarter earnings call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded in Thursday, December 4th, 2025. I'd now like to turn the conference over to Jess Plumber. Please go ahead.

Good morning. Welcome to the Hormel Foods conference call for the fourth quarter of fiscal 2025. We released results this morning before the market opened. If you did not receive a copy of the release, you can find it on our website, HormelFoods.com, under the investor section, along with supplemental slide materials. On our call today is Jeff Ettinger, Interim Chief Executive Officer, John Gingo, President, and Paul Keeneman, Interim Chief Financial Officer and Controller. Jeff, John, and Paul will begin by reviewing the company's fiscal 2025 performance before transitioning into commentary on our outlook for 2026. We will conclude with the Q&A portion of the call. The line will be open for questions following the prepared remarks. As a courtesy to the other analysts, please limit yourself to one question with one follow-up. At the conclusion of this morning's call, a webcast replay will be posted to the investor section of our website and archived for one year. Before we start this morning, I'd like to reference our safe harbor statements. Some of the comments we make today will be forward looking and actual results may differ materially from those expressed in or implied by the statements we will be making. please refer to our most recent annual report on Form 10-K and quarterly reports on Form 10-Q, which can be accessed on our investor website under the Investor section. Additionally, please note we will be discussing certain non-GAAP financial measures this morning. Management believes that doing so provides investors with a better understanding of the company's underlying operating performance. The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Further information about our non-GAAP financial measures, including our comparability items and reconciliations, are detailed in our press release, which can be accessed on our website. I will now turn the call over to Jeff Ettinger.

Thank you, Jeff, and good morning, everyone. Today we'll briefly review our fiscal 2025 results, then shift our focus to the strategic priorities and outlook for fiscal 2026. I'll begin with a few reflections on the year and our path forward. Paul will provide additional detail on key drivers from 2025, and then John will share our vision for 2026 and the actions we're taking to deliver consistent growth. I'll conclude with our fiscal 2026 outlook before we move on to Q&A. Fiscal 2025 was a challenging year. Candidly, we fell significantly short of our earnings goal. In navigating a dynamic consumer environment, elevated input costs, and some unexpected setbacks, our bottom line performance was disappointing. On the other hand, net sales exceeded $12 billion, representing 2% organic growth over the prior year, and supported by gains across all three segments. we delivered four consecutive quarters of year-over-year organic net sales growth. This demonstrates the strength of our Protein Forward portfolio. In the retail segment, our leading brands continued to hold number one or number two share positions in over 40 categories. Brands such as Genio, Applegate, Holy Guacamole, and Spam contributed strong growth for the year. Importantly, the Planches brand grew net sales year-over-year, despite first-half pressures arising from last year's production disruption. Collectively, these brands represent a wide range of consumer preferences, diverse value propositions, and eating occasions. Profitability was pressured across the retail segment, and this decline is reflected in our segment margins. Input cost pressures, driven primarily by heightened commodity costs, had a challenging impact across our broad retail portfolio in 2025. The food service segment continued to outperform the broader industry by leveraging our direct sales team, operator-driven innovation, and diverse channel presence. Our top-line strength was wide-ranging across many brands and categories, including the Genio Turkey Portfolio, Fire Braised Meats, Cafe H Globally Inspired Proteins, Branded Pepperoni, and Branded Bacon. These products all showcase the premium, protein-centric offerings that operators desire. The broader industry, however, experienced traffic declines and did not grow as expected. This, coupled with higher input costs, tempered the food service segment's 2025 results. The international segment's results highlight the importance of having a balanced portfolio, as some geographies outperformed while others lagged. Our China business was the biggest contributor to the international segment's top-line performance in fiscal 2025. And it achieved strong bottom line performance as well. Our branded export business saw strong top line performance, though commodity input costs and trade disruptions weighed on profits. The Brazil market was challenged for us this year and negatively impacted the international segment's ability to deliver on our growth objectives. At the total company level, our Transform and Modernize initiative played a critical role in offsetting a portion of the margin pressures we faced in 2025. We advanced many strategic pathways under the program, including expanding our distribution network, closing or reallocating product from multiple facilities, and advancing our data and process maturity. Much of the work we completed is laying the foundation for growth in future years. Late in fiscal 2025, we completed an extensive review of all administrative expenses. We made the decision to reduce some of our corporate positions and layers within the organization. This effort resulted in the reduction of approximately 250 corporate and sales positions, representing around 9% of this group. We also addressed the ongoing cost of benefits by making changes to certain programs. While these decisions are never easy, we believe these actions were both needed and responsible. We will also take the opportunity to allocate some savings from this work to reinvest in other areas, such as new capabilities and enhanced support of our growing brands. We believe we are coming out of fiscal 2025 with a conviction to win and in a position to grow. Paul Keenan will now provide a deeper look at our full year and fourth quarter financial performance. But first, I'd like to introduce Paul to our investor community and congratulate him on his new position. Paul stepped into the role of interim chief financial officer on October 27th, and he brings more than 30 years of experience at Hormel Foods, including his ongoing role as corporate controller. He is a deeply respected leader with a strong command of our business. I am confident you'll find Paul's insights valuable, and I look forward to you engaging with him more closely. With that, I'll turn the call over to Paul.